Compliance officers are facing pressures from the global growth and geographic expansions of their organizations, but almost half of respondents in a new report indicate that they don’t have adequate resources to support their organization’s efforts to effectively combat corruption. Most concerning in this regard is that over half of respondents were only “slightly confident” and fully one in four lacked any confidence at all in their company’s current controls to identify third-party violations of anti-corruption and bribery laws – an especially troubling figure considering that three quarters of foreign corrupt practices cases involved payments through third-parties.
This finding along with other insights into the current state of global anti-bribery and corruption compliance is included in the 2016 ABC Report published by Manhattan based corporate investigations and risk consulting firm Kroll and the Ethisphere Institute. First issued in 2011, the ABC Report provides compliance professionals with a comprehensive view of the types of bribery and corruption risks encountered by businesses every day, as well as the data to advocate effectively within their organizations.
This year’s survey asked anti-bribery executives worldwide a variety of questions about third party due diligence, stakeholder engagement, as well as merger and acquisition activity. The report is based on responses from 267 qualified senior-level executives working in ethics, compliance, and/or anti-corruption, hailing from scores of industries, both public and private companies with international operations.
Other key findings of the ABC Report include:
Bribery and corruption risks and associated programs to reduce these risks are evolving, but not consistently. Almost half of respondents (40%) believe their organization’s bribery and corruption risks will increase this year.
Organizations are “buying” risks along with their merger and acquisition transactions. 2015 was a huge year for M&A activity, and therein lies the rub for compliance officers. While M&A represents key growth opportunities for the business, compliance officers rarely, if ever, participate in the transaction early enough to be able to exert any influence.
Concerns over personal liability are growing. Almost one-third of respondents (29%) indicated that they are more concerned with personal liability than they were in prior years.
The report’s authors state that: “We are witnessing an evolution in anti-bribery and corruption compliance, both in the maturation of company programs and in global regulatory expectations. Advancements can especially be seen at the C-suite and board level, where engagement is trending up. Greater executive and board involvement, combined with a heightened appreciation of reputation-related risks, is driving a greater understanding that doing business the right way is the most effective path to sustainable and profitable growth. From the other side of the table, global regulators are being more transparent and deliberate in their guidance and expectations, and companies are responding. Despite some of these positive developments, the vast majority of respondents reported that in 2015 they were either as concerned (60%) or more concerned (31%) about bribery and corruption risks than in prior years.”
Click here to download the report (registration required).